
	Unrealized Gain (Loss) on Investments, Net		Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges		Defined and Postretirement Benefit Plans		Cumulative Translation Adjustments		Total

	(in millions)
Balance as of October 30, 2022	$	(75)	$	(52)	$	(88)	$	13	$	(202)


Other comprehensive income (loss) before reclassifications	16		(25)		—		—		(9)
Amounts reclassified out of AOCI	9		(21)		—		—		(12)
Other comprehensive income (loss), net of tax	25		(46)		—		—		(21)
Balance as of July 30, 2023	$	(50)	$	(98)	$	(88)	$	13	$	(223)


	Unrealized Gain (Loss) on Investments, Net		Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges		Defined and Postretirement Benefit Plans		Cumulative Translation Adjustments		Total

	(in millions)
Balance as of October 31, 2021	$	(1)	$	(103)	$	(169)	$	13	$	(260)


Other comprehensive income (loss) before reclassifications	(36)		73		—		—		37
Amounts reclassified out of AOCI	(9)		(27)		—		—		(36)
Other comprehensive income (loss), net of tax	(45)		46		—		—		1
Balance as of July 31, 2022	$	(46)	$	(57)	$	(169)	$	13	$	(259)

In March 2023, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previously existing $6.0 billion authorization approved in March 2022. As of July 30, 2023, approximately $13.4 billion remained available for future stock repurchases under the repurchase program.


	Three Months Ended				Nine Months Ended
	July 30, 2023		July 31, 2022		July 30, 2023		July 31, 2022

	(in millions, except per share amount)
Shares of common stock repurchased	4		10		13		37
Cost of stock repurchased	$	443	$	1,000	$	1,497	$	4,603
Average price paid per share	$	131.09	$	102.09	$	117.35	$	125.85

Effective January 1, 2023, stock repurchase amounts in the above table include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax. This excise tax is recorded in equity and reduces the amount available under the repurchase program, as applicable. Excluding this excise tax, total cost of stock repurchased were $439 million, or $129.86 per share, and $1,489 million, or $116.70 per share, for the three and nine months ended July 30, 2023, respectively.

We record treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If we reissue treasury stock at an amount below our acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings.

In June 2023, March 2023 and December 2022, our Board of Directors declared quarterly cash dividends, in the amount of $0.32, $0.32, and $0.26 per share, respectively. The dividend declared in June 2023 is payable in September 2023. Dividends paid during the nine months ended July 30, 2023 and July 31, 2022 totaled $707 million and $650 million, respectively. We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

We have a stockholder-approved equity plan, the Employee Stock Incentive Plan (ESIP), which permits grants to employees of share-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units and performance units. In addition, the plan provides for the automatic grant of restricted stock units to non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based awards made under the plan may be subject to accelerated vesting under certain circumstances in the event of a change in control. In addition, we have an Omnibus Employees’ Stock Purchase Plan (ESPP), which enables eligible employees to purchase our common stock.

During the three and nine months ended July 30, 2023 and July 31, 2022, we recognized share-based compensation expense related to equity awards and ESPP shares. The effect of share-based compensation on the results of operations was as follows:


	Three Months Ended				Nine Months Ended
	July 30, 2023		July 31, 2022		July 30, 2023		July 31, 2022

	(In millions)
Cost of products sold	$	42	$	34	$	138	$	112
Research, development and engineering	42		35		137		115
Marketing and selling	13		11		42		37
General and administrative	17		15		58		50

Total share-based compensation	$	114	$	95	$	375	$	314

The cost associated with share-based awards is recognized over the awards’ service period for the entire award on a straight-line basis, adjusting for estimated forfeitures. We calculate estimated forfeiture rate on an annual basis, based on historical forfeiture activities. Share-based awards granted to certain members of senior management allow for partial accelerated vesting in the event of a qualifying retirement based on age and years of service. The cost associated with performance-based equity awards, which include performance and/or market goals, is recognized for each tranche over the service period. The cost of the portion of performance-based equity awards subject to performance goals is recognized based on an assessment of the likelihood that the applicable performance goals will be achieved, and the cost of the portion of performance-based equity awards subject to market goals is recognized based on the assumption of 100% achievement of the goal.

As of July 30, 2023, we had $854 million in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards under the ESIP and shares issued under the ESPP, which will be recognized over a weighted average period of 2.7 years. As of July 30, 2023, there were 25 million shares available for grant of share-based awards under the ESIP, and an additional 13 million shares available for issuance under the ESPP.

A summary of the changes in restricted stock units, restricted stock, performance share units and performance units outstanding under our equity compensation plans during the nine months ended July 30, 2023 is presented below:


	Shares	Weighted Average Grant Date Fair Value

	(In millions, except per share amounts)
Outstanding as of October 30, 2022	11	$	92.31
Granted	6	$	103.11
Vested	(5)	$	71.61
Canceled	—	$	103.92
Outstanding as of July 30, 2023	12	$	105.27

During the first quarter of fiscal 2023, certain members of senior management were granted awards that are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to the TSR of the companies in the Standard & Poor's 500 Index. Each of these two metrics will be weighted 50% and will be measured over a three-year period.

The awards become eligible to vest only if the goals are achieved and will vest only if the grantee remains employed by us through each applicable vesting date, subject to a qualifying retirement based on age and years of service. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. The awards provide for a partial vesting based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement.

The fair value of the portion of the awards subject to targeted levels of adjusted operating margin is estimated on the date of grant. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the service period and reduced for estimated forfeitures.

The fair value of the portion of the awards subject to targeted levels of relative TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is reflected over the service period and reduced for estimated forfeitures.

Under the ESPP, substantially all employees may purchase our common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of our common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Our purchasing cycles begin in March and September of each of fiscal year. We issued a total of 1 million shares in each of the nine months ended July 30, 2023 and July 31, 2022.

Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model are outlined in the following table:



	Nine Months Ended
	July 30, 2023	July 31, 2022

Dividend yield	1.09%	0.74%
Expected volatility	43.3%	45.2%
Risk-free interest rate	5.14%	0.60%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$32.47	$35.79